The Reserve Bank of Australia reviews policy settings on Tuesday and while a majority of economists expect it will keep interest rates steady, some see a real chance of a quarter-point cut.

Interbank futures

have narrowed the odds, factoring in around a 70 percent chance of a 25 basis point cut to 3.25 percent. Economists are less convinced, with 13 of 19 surveyed by Reuters forecasting the RBA will keep rates on hold.

Any cut would trigger a rally in stocks that would benefit from a weaker currency or improved domestic spending, he said.

Top miner BHP Billiton

rose 1.0 percent to A$33.44, while the top banks were underpinned by prospects of a rate cut either this month or next, with gains of up to 0.6 percent for National Australia Bank

.

New Zealand's benchmark NZX 50 index

rose 0.6 percent to 3,853. STOCKS ON THE MOVE

* Investors welcomed a decision by Qantas Airways Ltd

to strengthen its air cargo network with the acquisition of 100 percent of the air freight business Australian Air Express, sending the shares up 2.3 percent to A$1.217.

0045 GMT

* Shares in takeover target Arrium

jumped another 6.6 percent to A$0.725, just near the A$0.75 bid price offered by a consortium including Noble Group

and POSCO

as investors hoped the rejected $1 billion offer would still lead to a deal. 0045 GMT * Fortescue Metals Group

and iron ore magnate Andrew Forrest won a High Court appeal over a conviction for misleading investors, opening the way for Forrest to return as an executive director of the company he founded. Shares in Fortescue were on a trading halt.

"It eliminates one area of uncertainty that has dragged on for quite a while. But for Fortescue it comes down to the real commercial exposure to genuine iron ore demand," said Jamie Spiteri, senior dealer at Shaw Stockbroking.